This opinion piece was originally posted on Politico on 17th March 2017

When Belarus President Alexander Lukashenko imposed a “social parasite” tax in 2015, he assumed — in normal populist dictatorial fashion — that a $245 fine on those who worked for less than six months a year would be a popular move.

What he didn’t expect was that ordinary citizens would, instead, show solidarity with the roughly half a million people affected and take to the streets in rare public protests.

The economic and political turbulence around Russia in the aftermath of the Crimea annexation in March 2014 is an interesting illustration of how a geopolitical event is itself necessary but not sufficient to cause significant geopolitical risk for investment portfolios.

The Ukrainian crisis prompted a number of countries and international organisations to apply sanctions against individuals, businesses and officials from Russia. In addition to diplomatic actions, the measures included travel bans and freezing assets owned by Russian officials and friends of Putin. A broad set of measures targeted sectoral cooperation with Russia and more general economic matters. In particular, Russian state banks were excluded from raising long-term loans in international financial markets. Bans were implemented on arms deals and exports of dual-use equipment for military use. The EU/US ban included exports of selected oil industry technology and services, to name just a few.

Ukraine’s prospects are under threat from developments on both sides of the Atlantic.

Something is stirring in Ukraine. The most obvious cause is Donald Trump’s imminent inauguration on 20 January, and the widespread fear in Kyiv that his push for some kind of Yalta 2.0 agreement with Russia will be at Ukraine’s expense.

But another parallel cause is the fear that the European Union is losing interest in Ukraine. After Dutch voters rejected the EU-Ukraine Association Agreement at a referendum in April 2016 (though many were really voting about the Netherlands and Europe), the price of bringing the Dutch government into line was high. In fact, it took a triple reassurance just to get PM Mark Rutte to take the issue back to parliament for a vote to overturn the referendum result.

Those reassurances came in the European Council’s resolution of 15 December, which declares that ‘the Agreement does not confer on Ukraine the status of a candidate country for accession to the Union, nor does it constitute a commitment to confer such status to Ukraine in the future’. Furthermore, it ‘does not contain an obligation for the Union or its Member States to provide collective security guarantees or other military aid or assistance to Ukraine’. And finally, it ‘does not grant to Ukrainian nationals… the right to reside and work freely within the territory of the Member States’. While this resolution does not roll back existing, modest, European commitments to Ukraine, it was interpreted as a major setback in Kyiv.

‘Ukrainian Eurointegration’: The Ukrainians are barred entry to the locked doors of the ‘EC’(EU).#